Few Starbucks customers will stop visiting if union efforts fail, analyst survey shows


BTIG analysts surveyed 1,000 Starbucks Corp SBUX, -1.29% customers and found that only 4% planned to stop visiting the coffee purveyor if negotiations with unions fail to result in an agreement. More than two-thirds (68%) said the effort would have no effect on their visitation habits, 15% said they would visit less often and 13% said they would visit more often. BTIG notes that Starbucks is required by law to negotiate with unions, but a contract isn’t guaranteed. Nearly 200 of Starbucks’ 9,000 U.S. locations have petitioned for union elections with eight locations receiving certification from the National Labor Relations Board. Workers in Buffalo voted to unionize in December 2021 and have a year to execute a contract or could possibly have to dissolve the union, according to BTIG. “Given the industry-leading average hourly earnings of $17 per hour (this summer) for Starbucks employees, in addition to healthcare benefits, tuition reimbursement, paid-time-off, we are unsure what concrete resolution the unionization effort seeks to achieve,” analysts said. “Our understanding is that employees are frustrated by issues that are plaguing the entire industry right now including staffing shortages, scheduling, poor training, and high turnover, issues that could be tempered with menu simplification, but not resolved with a contract.” Howard Schultz, Starbucks’ interim/returning chief executive said recently that new employee benefits may not include unionized workers, reports The Wall Street Journal. Schultz has also suspended share buybacks in order to invest in workers and stores. BTIG rates Starbucks stock buy with a $110 price target, down from $130. “We believe that prior momentum is returning as coronavirus disruption fades and customer mobility returns, setting up a strong sales and earnings recovery outlook over the coming quarters,” analysts led by Peter Saleh wrote. Starbucks stock is down nearly 31% for the year to date.

This article was originally published by Marketwatch.com. Read the original article here.

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